By ERIC YEP
Asia's light distillates market is weighed down by excess
supply, with naphtha differentials under pressure although
demand fundamentals remain largely stable.
Gasoline demand, however, tapered following a seasonal
increase during the festival month of Ramadan.
"Naphtha demand is quite steady but the bearish factor is
still voluminous arbitrage inflow from Europe," a Malaysian-trader
Singapore's stockpiles of light distillates, including
naphtha and gasoline, rose by 15% to 9.3 million bbl in the
week ended Aug. 14, data showed. The inventory levels are at
their highest in more than a year due to increasing supply, and
will pressure light distillate premiums, traders said.
Middle distillate premiums in Asia also declined during the
week, mainly for gasoil as demand levels appeared to moderate
in key consumer markets like China and India.
However, differentials will find temporary support in lower
onshore stockpiles of middle distillates in Singapore that fell
to their lowest level in around five years, Singapore-based
Gasoil and kerosene stocks in the city state fell by 12% to
6.3 million bbl in the week ended Aug. 14, and there are
enquiries to send jet fuel to the west, shippers said.
Singapore's residual fuel inventories rose by 3.5%, to 21
million bbl, traders said.
New refinery projects continue to raise
expectations of a fuel over-supply in the region.
JBC said Trans-Asia Refinery will build a 100,000-bpd refining complex in Pakistan to
produce gasoil and fuel oil.
"However, even with this refinery being built, our outlook
for Pakistan confirms that the country would remain a sizeable
net-importer of gas oil and fuel oil, with our 2020 figures
hinting at a combined requirement of still around 160,000
barrels a day for the two products," JBC added.
Dow Jones Newswires